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ALBUQUERQUE-New Mexico’s two major metros are enjoying a multifamily market that is stable and likely to stay that way for awhile. Barriers to development, combined with steady growth, are keeping weighted occupancies at 94% or higher.

In a report by CB Richard Ellis, Albuquerque’s 36,345-unit inventory is 94.9% and Santa Fe’s 2,674-unit supply is 94.2%. The weighted monthly rent averages $688 in Albuquerque and $800 in Santa Fe.

David Eagle, a senior vice president in Albuquerque, says occupancies in both markets are destined to continue ticking upward. First, the low-median income market is attracting a lot of renters. Second, population and employment growth are having an impact as well. “About 20% to 25% of the jobs here are public sector jobs, meaning government,” he says.

And finally, Eagle points out that neither city is a likely target for runaway development. He tells GlobeSt.com that pushing new developments through Santa Fe’s city council can be a difficult process, with much of the multifamily product being income-restricted. As for Albuquerque, he says “much of the land available for building is on the west side and people aren’t going to commute from there into town.” Given the high price of land and construction costs, he says the necessary rents could scare off tenants.

The stabilized occupancies and barriers to entry are attracting some institutional investors. Eagle confides there is an institutional investor looking at a multifamily asset in Albuquerque that he’s now marketing. “The investor said he liked the area overall because it reduces the beta of his portfolio,” Eagle says, citing the decreased volatility in relationship to the overall market.

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